Archive for April, 2010

An Update on the $5,000 Tax Credit in the District of Columbia

April 13, 2010

I contacted the office of Congresswoman Eleanor Holmes Norton (D-DC) to get an update on the $5,000 tax credit for the District of Columbia. I learned from Ms. Tai M. Brown, Legislative Associate, that “[t]he $5,000 first time homebuyer tax credit for the District passed the House and Senate, but has yet been signed into law.”  Ms. Tai speculates that because the tax credit has been retroactive in previous years, in its final form it will likely be “retroactive for 2010.”

Congresswoman Norton’s website provides a press release on the tax credits here.

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Tax Credit Deadlines for Homebuyers

April 7, 2010

You may have a lot of questions about the current $8,000 federal tax credit for first-time homebuyers. 

Here are the short answers:

1.         First-time homebuyers have until April 30, 2010, to sign a contract for the purchase of single family homes, condominiums and cooperatives for use as a primary residence.  Settlement must occur on or before June 30, 2010.

2.         The maximum amount of the credit is $8,000, or 10% of the sales price up to $8,000.

3.         The purchaser must reside and use the home as a primary residence for 36 consecutive months, or the tax credit may have to be repaid.

4.         Individuals earning up to $125,000 a year and couples earning up to $225,000 a year are eligible.

 5.         Anyone taking the credit from a home purchased in 2010 may take the Credit on their 2009 federal tax returns which is due April 15, 2010.

A non-dependent child over the age of 18 can qualify as a first time homebuyer and receive the credit even if a parent who does not qualify as a first time homebuyer co-signs the mortgage. The property must be the non-dependent child’s principal residence to qualify.

There is also a credit for current, qualified homeowners for a $6,500 federal tax credit.

As an alternative to the tax credit describe above, residents of the District of Columbia may be eligible for a tax credit of up to $5,000 even after April 30, 2010, assuming that the credit is extended beyond that date. The extension has not, however, been officially enacted by Congress, but is in a conference committee.

Please note that at no time will purchasers of homes in the District of Columbia be eligible for both the $8,000 tax credit and the $5,000 tax credit. Taxpayers must opt for one or the other.

It does not appear that this $8,000 tax credit will be extended beyond April 30, 2010.

A tax advisor should always be consulted to determine exactly what tax implications these issues will have on you and your property before taking any action on your own.